Having no expertise here - and professing none - I believe we were in Anxiety stage of this chart and have moved somewhere between Denial and Fear - no guessing - Let's Watch!
1. The Dow Jones Industrial Average broke and then settled at 13,300 - signaling a major change.
2. The S & P 500 broke 1500 to close at 1490
3. The Plunge Protection Team - (search Google with quotes "Plunge Protection Team") lost their effectiveness. Maybe Tomorrow they will try to recover some of their power.
4. A Bear Market has begun - yes there will be actions and reactions that a moment will change, it's called volatility - but at the end of the day, or the week or the month - a Bear Market will prevail.
5. One of our great Recessions will begin and penetrate everything by the end of the first Quarter in 2008. It will spread like a virus around the world - no country will be spared.
6. This along with the Iraq war will be a Bush Legacy - and he will become a pariah in "OJ" glory!
It's hard to believe that there will be despair in this day and age - where some expected miracle will appear to untangle this web.
"The people come and go..." filling up their gas tanks with refined crude oil that has approached $100 per barrel, accepting what it is not unlike getting a cup of coffee in the morning - only to find that the cup is now half its size - at twice its price...so be it - they think.
In a few months hundreds of thousands of ARM's (adjustable rate mortgages) will begin with new payment schedules - substantially increasing monthly payments - many people who live from paycheck to paycheck - fully allocated - will come up short - with no home equity to borrow against - maybe they will cash in their 401K's, pay the penalty and the tax, and do some short-term covering of their cash short positions. Inflation, not really, Stagflation - YES (Stagnation + Inflation =Sluggish economic growth coupled with a high rate of inflation and unemployment.)
Surely, our leaders will find a solution - and (it) will just miss us like a bad storm.